As a Canadian dispensary owner, it is especially important to stay on top of your taxes including payroll deductions and payroll remittance.
This is the second part to our two article series, if you haven’t yet read our first article on payroll deductions - you should check it out here!
Before we dig into this article, it is important to note that this article references employee payroll deductions and remittances. Other taxes dispensary owners may be obligated to pay, including sales tax and so fourth, will not be covered in this article. And with that out of the way, let's dig in!
What is payroll remittance?
Every mandatory payroll deduction made on your employee's income must be remitted to the Canadian Revenue Agency (CRA). Knowing how to calculate deductions is one thing; sending it to the appropriate agency is another.
Every legislated deduction withheld from an employee's income must be remitted accurately and as at when due. As an employer, it is your responsibility to remit the CPP contributions, EI premiums, and income tax deducted from your employees, along with your share of CPP contributions and EI premiums to the CRA.
Failure to remit withheld payroll deductions and remittances to the CRA can attract monetary penalties and sanctions.
Late remittances are also frowned upon by the CRA, which is one reason you need to hire professional payroll processing services that can help you handle payroll deductions and remittances timely and appropriately.
When are payroll remittances due?
The only way you can stay clear of penalties from late remittances is by knowing exactly when your payroll deductions and remittances are due.
Each employer may have different remittance dates, and this depends on the type of remitter you are and your remitting frequency.
As an employer, you may fall under one of the following remitter types;
- Quarterly
- Regular
- Threshold 1 Accelerated
- Threshold 2 Accelerated.
We have curated an official list of remitting frequency, periods, and due dates by remitter type from the Canada Revenue Agency's official website to help you know when your remittances are due.
Source: Government of Canada
Your remitter type determines your remitting frequency, and this also affects your due dates. Your average monthly withholding amount (AMWA) from two calendar years ago is usually used to calculate your remitter type. If you don't already know your AMWA, you can visit the official Canada Revenue Agency's AMWA page to learn more.
How do I file my payroll remittances?
Before you can be eligible to pay remittances as an employer in Canada, you must have registered your business, confirmed your business number, and opened a payroll account with the CRA.
After all necessary information has been gathered from your employees through the TD1 form and all deductions have been accurately deducted, you can then go ahead with paying remittances to the CRA.
How do I pay my payroll remittances?
As an employer, you can pay remittances electronically or through remittance vouchers, which means your statement of account will also be received by mail.
If you pay payroll deductions and remittances by mail, you should make your payment payable to the Receiver General. Ensure you print your payroll program (RP) account number on it and mail it to the Sudbury Tax Centre with your remittance voucher.
It is advisable that you post-date your payment to your remittance due date when using this method.
As a new employer, you are classified as a regular remitter and should pay your remittances to the CRA on or before the 15th day of the month that follows the month the deductions were made.
In case you are a new remitter and do not have a remittance voucher, you should include the following information when making your payment:
- A text that you are a new remitter,
- the remitting period your remittance covers (if your remittance covers more than one period, provide a detailed breakdown)
- your payroll program (RP) account number
- your business' complete legal name, address, and telephone number
Once you have paid your first remittance, your remitter type will be changed to quarterly or accelerated remitter, and this means that you have less paperwork to do in the future.
You do not need to go through all this stress at all if you think of outsourcing your payroll deductions and remittances to professional payroll service providers like KayaPush payroll.
This sophisticated software solution does all the filing for you, it makes payroll taxes easy.
What else do I need to know?
It is important as a business owner to know what source deductions are, what information you need to deduct them and how to remit them appropriately to the CRA without incurring any penalty fees on your business.
If you are unsure of what to deduct from your payroll, be sure to check out the first part of this article - payroll deductions.
On the other hand, it may not be necessary to process your payroll yourself, especially if you have a large business with many employees of different job descriptions.
You can make the CRA do your payroll processing for you if you feel you can afford their fees or outsource to other professional payroll service providers like KayaPush who have built reputability among small and large business owners in Canada.
You don't want to end up paying $1,000 to $25,000 as penalties for noncompliance to Canadian Revenue Agency when you can have experts in payroll processing do the hard work for you while you focus on other important business activities. You can learn more about the details for particular offenses from the CRA's official website.
Imagine an automated payroll tax solution.
Manual tax calculations, deductions and remittances when it comes to payroll tax can take hours to calculate manually. Not to mention the possibility of making an error, and incurring a fine. Wouldn't it be a dream if there was a solution that could automate any tax calculation, so payroll tax calculations were just, done?
Well there is. By investing in a smart automated payroll solution like KayaPush, you don't have to spend any time calculating, or remitting your taxes, it is all done for you.
Book a demo to learn more.
Curious to learn more about payroll in general, and how it apply's to your cannabis dispensary? Download our free guide below to learn more about payroll remittances for dispensary owners, and more!
